The Bentley Company owns a subsidiary in India. The subsidiary's balance sheets for the last two years are presented below, in rupees \((\mathrm{R})\) :

The Bentley Company formed the subsidiary on January 1, 20X6, when the exchange rate was 30 rupees for 1 U.S. dollar. On December 31, 20X6, the exchange rate had increased to 35 rupees for 1 U.S. dollar, and on December 31, 20X7, the exchange rate was 40 rupees for 1 U.S. dollar. Income is earned evenly over the year, and no dividends have been declared by the subsidiary during its first two years of existence.
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a. Present both the direct and the indirect exchange rate for the rupees for the three dates of: (1) January 1, 20X6, (2) December 31, 20X6, and (3) December 31, 20X7. Has the dollar strengthened or weakened in 20X6, and in 20X7?

b. Prepare the subsidiary's translated balance sheet as of December 31, 20X6, assuming the rupee is the subsidiary's functional currency.

c. Prepare the subsidiary's translated balance sheet as of December \(31,20 \times 7\), assuming the rupee is the subsidiary's functional currency.

d. Compute the amount that \(20 \times 7\) 's other comprehensive income would include as a result of the translation.

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December 31, 20X6 December 31, 20X7 Assets: Cash Receivables Inventory Fixed Assets, net Total Assets Equities: Current Payables Long-term Debt Common Stock Retained Earnings Total Equities R 100.000 450.000 680.000 1,000,000 R2.230.000 R 260.000 1.250,000 500.000 R 80,000 550,000 720,000 900.000 R2.250.000 R 340,000 1,100,000 500.000 310,000 220,000 R2,230,000 R2,250,000